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WASHINGTON WIRE

December 7, 2007
Issue 154

Senate Scraps Medicare Markup: Moves to Negotiations with House

Draft MedPAC Would Increase Hospital Payments

Congress Approves Paired Organ Donation Bill

Top Story

Senate Scraps Medicare Markup: Moves to Negotiations with House

Senate Finance Committee Chairman, Max Baucus (D-MT), cancelled a scheduled markup on Medicare legislation this week, stating that Senate leadership will move directly to conference negotiations with the House.

For weeks, Senate Finance Committee Members and staff have been attempting to draft a Medicare package to address several pending Medicare issues, most notably a scheduled 10% cut in Medicare physician payment rates in 2008 under the statutorily-based Sustainable Growth Rate (SGR) formula. The bill has been targeted by other stakeholders who have eyed the pending package as an important and viable legislative vehicle to attach other Medicare and Medicaid priorities.

Earlier this year, the House approved legislation that would provide physicians with a 0.5% payment bump for each of the next two years. The bill also includes initial provisions for a multi-pronged expenditure target system to replace the SGR formula in out years and makes changes to numerous other Medicare programs.

Senate Finance Committee negotiations broke down this week after Members were unable to agree on the size and cost of their package, which is primarily focused on a one or two year fix to the physician payment issue. In addition, there are vast disagreements over how to pay for the Senate Medicare package, including the extent to which it includes cuts to Medicare Advantage (MA) programs. To complicate matters, the Bush Administration threatened this week to veto legislation that makes cuts to the MA program or reverses unpopular regulatory policies.

Soon after Chairman Baucus announced this week that they were sidestepping normal legislative procedures and entering directly into the negotiations with the House, House and Senate staff began working on the final Medicare bill which potentially could be attached to a massive omnibus spending bill. It is unclear how expansive the final package would be, but expectations are that it will be significantly smaller than the House's original bill.

With the House expected to adjourn for the year on December 14th, an omnibus spending bill, which will likely attempt to wrap-up the remaining appropriations work for the year, is scheduled to be on the house floor as early as Tuesday, December 11th.

Health Care News

Draft MedPAC Would Increase Hospital Payments

Draft recommendations presented at the Medicare Payment Advisory Commission (MedPAC) meeting this week suggest a full market basket increase in fiscal year (FY) 2009 for Medicare inpatient and outpatient care.

MedPAC staff cited data on Thursday showing that while the hospital industry is generally doing well, hospital profit margins were negative 4.8% in 2006, compared to negative 3% in 2005. The data also showed that hospitals lost more money on Medicare patients in 2006 than 2005.

The draft recommendations to Congress, unveiled by the commission on Thursday, would increase Medicare hospital rates by a full market basket adjustment for this year. Additionally, the draft recommendations did not include an adjustment in the market basket for productivity gains as it has in the past. Such an adjustment could decrease the market basket, which staff estimates to be a 3% in FY 2009, by 1.5 percentage points.

The draft recommendations on hospital payments also includes the implementation of a quality incentive program to be potentially funded by a cut in indirect medical education (IME) payments adjustments currently provided to teaching hospitals.

Other draft recommendations unveiled at the MedPAC meeting include a freeze in skilled nursing facility payments and long-term care hospitals in FY 2009. Also under the draft recommendations, inpatient rehabilitation facilities would receive a 1% increase in FY 2009.

MedPAC will vote in January on the final recommendations to be submitted to Congress in March.

Congress Approves Paired Organ Donation Bill

This week, after months of debate, the House and Senate approved the "Charlie Norwood Living Organ Donation Act;" which aims to increase the chances for patients with kidney disease to receive living donor transplants. The bill is named after transplantation champion, the late Congressman Charlie W. Norwood (R-GA).

This legislation amends the National Organ Transplant Act (NOTA) to clarify that criminal penalties do not apply to paired donations of human organs and includes a clear definition of paired donation. The legislation will likely open the door for implementation of a national registry to facilitate the matching of incompatible living kidney donor-patient pairs, allowing patients with incompatible donors to match-up with other pairs in similar situations.

The paired donation bills were re-introduced this year in the House by Congressmen Norwood (R-GA) and Jay Inslee (D-WA), and in the Senate by Senator Carl Levin (D-MI) and 11 others cosponsors. The American Society of Transplant Surgeons (ASTS), a client of PPSV, worked tirelessly with House and Senate sponsors on this bill, which is expected to be signed into law shortly.

Upcoming Events

Hearings

Tuesday, December 11, 2007

Court Secrecy and Public Health and Safety
Senate Judiciary - Subcommittee on Antitrust, Competition Policy and Consumer Rights
2 p.m., 226 Dirksen

Wednesday, December 12, 2007

Breast Cancer, Mental Health Bills
Senate Health, Education, Labor and Pensions Committee
10 a.m., 430 Dirksen

VA Outpatient Care
House Veterans' Affairs - Subcommittee on Oversight and Investigations
Subcommittee Hearing
10 a.m., 345 Cannon

Veterans' Mental Health Care
House Veterans' Affairs Committee
2 p.m., 334 Cannon

Thursday, December 13, 2007

The Global Fight Against AIDS, Tuberculosis and Malaria
Senate Foreign Relations Committee
2:30 p.m., 419 Dirksen

For More Information

For further information on any topics discussed or publications listed, or to get copies of anything mentioned in this alert, please call 202.466.6550 and ask for the Legislative Practice Group.

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